For a quick reminder of this, check out the “1938 cost of living” snapshot below. It was recently tweeted out by “Classic Pics.”

Harvard Tuition: $420 a year.

A gallon of gas: 10 cents.

Movie ticket: 25 cents

Postage stamp: 3 cents

Average income: $1,731 per year

House: $3,900

Yes, this was still in the middle of the Depression, when prices were low. But still.

It’s scary to invest in stocks, because you can lose a lot of money quickly. But over the long haul, stocks offer inflation protection, because companies pass price increases through to their customers.

If you just hoard cash for the long term, meanwhile, you’re pretty much guaranteed to lose.

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Comments

“But over the long haul, stocks offer inflation protection, because companies pass price increases through to their customers. If you just hoard cash for the long term, meanwhile, you’re pretty much guaranteed to lose.”

Interesting post, and thank you, don’t get me wrong, but people with the most money, that is many older people, they don’t have a “long haul” or option to recover. Another 1929 sequence, and they will die poor, before recovering. Stocks are a terrible idea, for anybody who has money to invest they can’t afford to lose.

In addition, we have a demonstrable casino in the markets now, disconnected from macro economic realities. The stock market, by fundamentals that would have sunk it in previous generations, even a couple decades ago, is now, as if, rejoicing over stat after stat that shows the core of the apple rotting, and many official stats themselves are fraudulent, like the way unemployment is calculated, eliminating discouraged workers who couldn’t find a job and dropped off the unemployment roles: those millions of unemployed don’t exist. How dumb can such numbers get? Or inflation figures, which avoid inflationary components: just eliminate things that have escalated beyond convenient from the computation. Productivity in the toilet, bloated inventories and debt mean nothing, as we speak: you’re whole local mall could close down, and that would be worth a hundred more points on the upside in these fake markets, if freaking Yellin just hints at postponing a rate hike, which doesn’t mean a hill of beans in the bulk of the real economy already saturated in debt, except that people can’t even earn anything on what financial resources they have, not even that available to grow the economy. Ever more debt and diminishing wealth for 99% of those not hooked into looting the U.S. Treasury? Now, how is that supposed to work?

For goodness sake, the market volume is fake, computers trading the same issues back and forth all day long, to try and scalp a spread, stocks “owned” for minutes, even seconds, before they’re churned again: this is not even real human interest in stocks, the volume phony. This isn’t even investment. Then you have free money from the Fed being plowed into stocks by banks: this is neither public interest in stocks. It’s more like some bizarre Ponzi scheme, throwing good money after bad, issuing debt to replace that which had no foundation in the first place, gone up in smoke. Stock buybacks to create the appearance of growth.

So, I’d like to see your answer as to what long haul exists in markets that aren’t even real anymore, that no longer respond to reality, short of nuclear war? (Which would probably result in new highs…) What reality can you even present, moving forward, for a situation disconnected from reality? It seems your entire premise is still based on the notion the naked emperor is wearing new clothes, that the wizened old geezer behind the curtain is really a wizard.

I submit this ain’t your Daddy’s market anymore, not sure anybody can even figure out what the hell it is to invest in, hence some room for doubt there is such a thing as a “long haul” anymore, when reality, itself, has turned to surreal?

i put a bunch in mining stocks–figure to at least double next year–and there is trillions looking for yield and with low rates,banks,in europe have been putting billions in the usa stock market–they will be the first to leave when the retail investor jumps in–the debt loads are insane and will bring everything down someday–Martin Armstrong blog’s and newsletter i read to get clues on all that–his computer program is second to none–yup–its way crazy but the usa dollar and usa stock market only game around for the big bucks,the usa dollar lost big recently but when europe goes completely in the toilet its the usa dollar again–its all going to hell but when? the bond market and pensions will get killed–next year maybe? now with war all bets off except gold/silver but that can be very dangerous too…i hoard a lot of cash–dont trust anything,nothing,its all crap

When reality sets in sure is the perennial question, the disconnect bizarre. As you mention, I’ve often thought one thing that props things up anymore is the world awash in dollars and other major currencies, at the same time not enough demand to stress inflation, for the paucity of the overall debt economy on Main Street that can’t move goods well, but that there’s really nowhere else to go than dollars and its instruments, presumably, growth instruments. There’s not enough gold, and trade isn’t in gold, nor will it ever be, again, beyond a post-apocalyptic scenario. (In that case, all bets are off, discussions academic: buy bullets, to delay, for a time, getting yours between the eyes?) Otherwise, I believe the HFT trading is propping up the market, providing some sort of floor for people actually trading stocks and a virtual market when they’re not, markets that would tank for lack of enough demand, otherwise. I suspect the big players aren’t freaking out, because they’ve got nowhere else to go, too much to unload for the thin market to absorb, without killing their own goose, hence they stay put. You’ll notice that anytime there’s any appreciable real selling volume, by real people, the index quickly dives. You can see that volatility. They can only unload at a snail’s pace.

I can’t make sense of the stock market anymore, for some years now, as mentioned it no longer responsive to the real economy and now a real casino paradigm. Gold or gold stocks do seem very attractive at this point, but those dreaming of gold going through the roof, as the dollar hyper-inflates, seem to fail to see the world they will then be living in they’re unwittingly wishing for, where they become a target for just having gold, as if thinking everybody else will starve, as they carry on as usual, going to the supermarket or gas station with their gold or silver? In that scenario, you’d get whacked at the gas pump, even if it were, absurdly, fitted to take your gold or silver. If anything, cashless is coming, perhaps gold could even be made illegal in mainstream trade.

Myself, I long ago invested in the Lord Jesus, have found trusting in God reliable, right here in this world, also will one day get to walk on streets of gold. “Gold? Why, we’d fix potholes with that! Though we don’t get potholes. By the way, what’s money? And this paper dollar thing? You don’t even need toilet paper here, son!”

But it seems sure gold will have its day, by inflation or safe haven. A lot of the stocks could go through the roof, majors could quadruple, some juniors 1000% or more, if people start chasing the limited gold and gold instruments market, in numbers, for any reason whatsoever. And if, that is when, the truth be known, it all precipitates to the bottom, you will probably at least be able to afford a nice gun to blow your brains out with.

You’re quite right. It really is all crap. Maybe we need a market for crap, with the NYCI, New York Crap Index. “Be sure to stay tuned to MSNBC, for all the up to date crap news!”

Ezekiel 7:19 They will fling their silver into the streets and their gold will become an abhorrent thing; their silver and their gold will not be able to deliver them in the day of the wrath of the LORD. They cannot satisfy their appetite nor can they fill their stomachs, for their iniquity has become an occasion of stumbling.

James 5

1 Come now, you rich, weep and howl for your miseries which are coming upon you.
2 Your riches have rotted and your garments have become moth-eaten.
3 Your gold and your silver have rusted; and their rust will be a witness against you and will consume your flesh like fire. It is in the last days that you have stored up your treasure!
4 Behold, the pay of the laborers who mowed your fields, and which has been withheld by you, cries out against you; and the outcry of those who did the harvesting has reached the ears of the Lord of Sabaoth.
5 You have lived luxuriously on the earth and led a life of wanton pleasure; you have fattened your hearts in a day of slaughter.
6 You have condemned and put to death the righteous man; he does not resist you.
Exhortation
7 Therefore be patient, brethren, until the coming of the Lord. The farmer waits for the precious produce of the soil, being patient about it, until it gets the early and late rains.
8 You too be patient; strengthen your hearts, for the coming of the Lord is near.

Those tiny diodes and resistors in the chips burn out. when enough of them go the malfunctions start. We have a 686 that boots up in about 1 out of 10 tries. Listening to this thing trying to read web pages is hilarious. I have a good idea where these guys are headed.

I had a reply go to the wrong place. Ignore it. Inflation is terrible. The fun part is the whining over the fact that people are not consuming. Who can afford to. No jobs, minimum wage jobs and with energy prices so high it is crush time. The FED will leave because there is no money to steal. Watch them close that they do not steal the resources of the country. There are examples of that already, stop them, be vigilant. Don’t let them pillage and rape the country on the way out.